Ok, if Microsoft isn't a competitor, how do you feel about Tarantella? It recently bought New Moon, which puts it -- productwise -- in direct competition with Citrix. Are you not worried that they will feed on the customers you are ignoring?
They have the same economic issues getting to these customers. I think it is smart to know where you should be focused and where you shouldn't. If they can figure out a go-to-market methodology where the economics do work, I think it is fantastic. The reality is that their revenue is about 1 percent of ours. On one hand you always want to respect and pay attention to competition and on the other hand, you have to meter that amount of attention based upon how significant they are in terms of size.
Analysts are predicting that the software industry will consolidate significantly over the next year -- do you agree?
You have to be careful when listening to analysts. There is likely to be more merger and acquisition (M&A) activity, it is very likely, but the laws of physics around M&A have not changed. You know what has changed? The industry has been down for a few years and companies have focused on their own problems, so now there is a little sunshine and the clouds open a little bit outside, money is burning a hole in their pockets. People have short memories -- doing M&A, especially in software is very difficult. You have all kinds of cultural, software integration and interface challenges. It has to be approached very carefully.
So does that mean Citrix will not be making any acquisitions?
We do not have a growth by acquisition strategy. Our strategy goes like this: today, we dominate a marketplace that we created. There is a little bit that we don't have but we have done research to show that what we have is only a piece of the overall opportunity for presentation server, which is huge. If we need to acquire something to achieve our goal, we will do that. But our bias is to towards building things -- all the best software companies in the world have a bias towards building.
But when there is a time to market or a domain expertise issue, then you have to step out and buy. That is a very different angle to mergers and acquisition; you hear other companies say, 'Hey, I got to scale up so I'm going to start buying things.' I don't know anyone that has made that work over a long period of time. CA has, and BMC tries to do this, but they haven't done well from it.
